Understanding Linked Travel Arrangements under the EU Package Travel Directive, Lecture notes of Communication

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Industry Guidance

EU Package Travel Directive

June 2018

Contents

Section Pages Introduction: Helping operators to prepare for the Package Travel Directive 2 Making Linked Travel Arrangements Workable for Operators and Meaningful for Consumers 3 Linked Travel Arrangements: Understanding “facilitation” through the e-Commerce Directive 4 Linked Travel Arrangements: Understanding “in a targeted manner” through the Unfair Commercial Practices Directive

Linked Travel Arrangements: Two Legal Tests 6 Linked Travel Arrangements: Applying the Legal Tests 7 Linked Travel Arrangements: “A Single Visit” or Contact With his “Point of Sale” 8 Linked Travel Arrangements: “In a Targeted Manner” 9 Linked Travel Arrangements: Examples 10 - 21 Linked Travel Arrangements: Insolvency Protection and The Standard Information Form 23 - 26 Exclusion of Accommodation for Residential Purposes 27 Assessing Packages Including “Other Travel Services” 28 1

Making Linked Travel Arrangements Workable for

Operators and Meaningful for Consumers

The revised Package Travel Directive defines Linked Travel Arrangements (LTAs) as follows: ‘Linked travel arrangement’ means at least two different types of travel services purchased for the purpose of the same trip or holiday, not constituting a package, resulting in the conclusion of separate contracts with the individual travel service providers, if a trader facilitates: (a) on the occasion of a single visit or contact with his point of sale, the separate selection and separate payment of each travel service by travellers; or (b) in a targeted manner, the procurement of at least one additional travel service from another trader where a contract with such other trader is concluded at the latest 24 hours after the confirmation of the booking of the first travel service. Subparagraphs (a) and (b) above leave a number of unresolved questions for operators. In a multi-channel era - where consumers are as likely to book through an app as they are a website via a desktop - the terms “single visit” or “contact with a point of sale” need to be precisely defined if operators are able to comply. Similarly, facilitating in a “targeted manner” needs to exclude general advertising and focus on situations where a second transaction is facilitated through an offer for sale to the traveller. In the following pages we seek to precisely define subparagraphs (a) and (b) of Article

3. 5 to achieve an interpretation that responsible operators can use to prepare for compliance. 3

Linked Travel Arrangements: Understanding

“facilitation” through the e-Commerce Directive

The Commission’s ‘Guidance on the implementation/ application of Directive 2005 / 29 /EC on Unfair Commercial Practices’ (published 25 th^ of May 2016 ) analyses the interaction between the e-Commerce Directive and consumer law. It refers to the L'Oréal vs eBay case (C- 324 / 09 ) in order to understand the circumstances under which a platform can be considered to be active and therefore outside of the safe harbour protections in the e-Commerce Directive. Paragraphs 115 and 116 of the judgement set out the Court’s reasoning in this case: 115 As the United Kingdom Government has rightly observed, the mere fact that the operator of an online marketplace stores offers for sale on its server, sets the terms of its service, is remunerated for that service and provides general information to its customers cannot have the effect of denying it the exemptions from liability provided for by Directive 2000 / 31 (see, by analogy, Google France and Google [C- 236 / 08 ], paragraph 116 ). 116 Where, by contrast, the operator has provided assistance which entails, in particular, optimising the presentation of the offers for sale in question or promoting those offers , it must be considered not to have taken a neutral position between the customer-seller concerned and potential buyers but to have played an active role of such a kind as to give it knowledge of, or control over, the data relating to those offers for sale. It cannot then rely, in the case of those data, on the exemption from liability referred to in Article 14 ( 1 ) of Directive 2000 / 31. In this case eBay was considered to be “active”, and therefore lost its intermediary liability protection, when it optimised the presentation of offers for sale or promoted them thereby giving it “knowledge”. “Facilitation” in the context of the revised Package Travel Directive must be considered as “active” in the sense described in the L'Oréal vs eBay case. Situations in which a trader is acting in a neutral way with no effort to optimise or promote an offer for sale would therefore not contribute to the creation of an LTA. 4

Linked Travel Arrangements: Two Legal Tests

Any operator seeking to assess whether a Linked Travel Arrangement could be formed first has to assess whether the two “travel services” involved meet certain baseline conditions:

• They are one of carriage of passengers, accommodation, car rental or an additional tourism services which is not ancillary and constitute either more than 25 % of the overall value of the package or is the purpose of the trip or holiday.
• They are for the purpose of the same trip or holiday.
• They result in separate contracts.
• There is an element of “facilitation” i.e. an action on the part of the trader There are then two tests, set out in sub-paragraphs (a) and (b) of Article 3. 5 , that the operator has to apply. These tests are designed to cover “facilitation” in order to procure a second purchase during a single contact or visit with a single point of sale, sub- paragraph (a), and “facilitation” in a “targeted manner”, sub-paragraph (b). The former has a lower burden of proof because the intention to incentivise a second booking is clearer, if you interpret a single visit or contact with a point of sale to mean the booking path. By contrast “facilitation” in a “targeted manner”, which occurs outside of the booking path involving multiple points of sale, entails several qualifiers. In the following page we set out a decision tree explaining how these legal tests should be applied in practice. 6

Linked Travel Arrangements: Applying the legal tests

For the purposes of the same trip or holiday? Is it a single visit or contact with one point of sale? Is there “facilitation” by the first trader? 1 Yes No LTA No LTA (a): Single visit or contact with one point of sale Is it “in a targeted manner”? 2 Is a contract concluded within 24 hours of the booking confirmation from the first trader? No No LTA Yes Yes Yes LTA (b): In a “targeted manner” e.g. Consumer uses different tabs to make two transactions or mobile booking app remains open. e.g. Advertising placed by a third party e.g. Google and which is generic in nature e.g. “great deals at expedia” or “10% off at Starwood resorts” LTA (a) example: While in the booking pat,h the consumer is subject to cross-selling i.e. encouraged to make a second purchase on the same website or incentivised to make a second purchase in a white label environment. A single visit or contact with a single point of sale ends when the consumer cashes out e.g. by paying for their shopping basket, or the booking path times out. LTA (b) example: Within 24 hours of the confirmation of the first booking the consumer concludes a second contract with a second trader on the basis of a real “offer for sale”(i.e. the offer is based on travel destination and dates and is bookable). Resulting in the conclusion of separate contracts? Is each “travel service” (two or more) in line with the definition in the Directive? Yes Yes No LTA No No LTA No No LTA No At least one of the services is not carriage of passengers, accommodation or car rental or an additional travel service which is more than 25% of the overall value of the package or the purpose of the trip or holiday. Two separate transactions for different trips Package if sold at an inclusive price e.g. Relevant advertising “great hotel deals in Rome at expedia” displayed on an airline website after purchasing a flight to Rome but placed by a third party e.g. Google adsense e.g. this would be the case if, despite receiving a bookable offer for a second travel service via a confirmation email, the consumer fails to make a second purchase within 24 hours of the first transaction.

Linked Travel

Arrangements:

Applying the Legal

Tests No LTA

No LTA No Yes No Yes Is there No “facilitation” by the first trader? 1 7 References 1.See the L'Oréal vs eBay case (C-324/09) on page 4 of this document.

2. See in particular paragraph 116 of the above case and article 2. (i) of the UCPD see page 5 of this document. Are they selected and agreed to be paid for separately? No No LTA Yes Is there “another trader?” Yes No No LTA No second trader. Cases where a consumer receives an email booking confirmation with offers which link back to the first traders’ website are out of scope

Linked Travel Arrangements: “In a Targeted

Manner”

• It is not the intention of the Directive to include all internet advertising in the scope of Linked Travel Arrangements since the recitals of the Directive make a distinction between advertising that “simply informs” consumers about the availability of relevant travel products vs targeted efforts to procure a second, linked purchase.
• Recital 12 of the Directive makes clear that general internet advertising e.g. where cookies or meta data are used to place advertisements cannot be considered as being “targeted” in the sense described in subparagraph (b) of Article 3. 5. This advertising, as is the nature of online advertising which uses cookies to anticipate a consumer’s preferences, will always be relevant e.g. will advertise services at a location where the consumer has already booked a flight. However, this type of advertising will not include a bookable offer for sale (through a deep link) for an additional service linked to the first travel service. The recital talks about advertising which is only designed to “simply inform” the consumer but is not a genuine attempt to facilitate a linked transaction “in a targeted manner”.
• Recital 13 supports an interpretation of Linked Travel Arrangements as occurring where a consumer is targeted with a tailored offer for sale inducing them to make an additional linked purchase. The recital uses the example of an email sent after the booking of a first travel service with an “invitation to book” suggesting an offer for sale is made. To make an offer the trader would have to be in possession of the travel dates and travel location. It is not enough to simply inform consumers about the existence of relevant travel services, rather they must be invited to book directly through an offer.
• This distinction between advertising that “simply informs” and an “invitation to book” through an “offer for sale” is consistent with the approach used in the UCPD (see page 5 of this document). The UCPD distinguishes between an “invitation to purchase” and mere advertising, with the former including characteristics of the product or service and an indication of price which allows consumers to make an “informed purchase”. What the Directive says: Recital 12 Targeted manner does not include general advertising “where cookies or meta data are used to place advertisement on websites” (Recital 12) What the Directive says: Recital 13 A Linked Travel Arrangement occurs where there is an invitation to book i.e. a real bookable offer for sale. “…where along with the confirmation of the booking of a first travel service, such as a flight or a train journey, a traveller receives an invitation to book an additional travel service[…]” In scope Must include an offer which is more than just relevant but in fact is bookable i.e. is based on knowledge of both the travel destination and dates. Out - of-scope Informational but relevant advertising e.g. in the form of a banner or pop- up advertisements. Placed directly on a website using cookies or metadata by another trader or indirectly through an intermediary like Google AdSense. 9

LTA (a): In-Scope Example

White labelling (single visit to same point of sale)

White labelling implies that upon conclusion of the first booking

with a supplier (airline, etc.), the consumer stays in the same

visual environment and the first trader “facilitates” the

purchase of a second travel service. The supplier of the

additional travel service is different from the first supplier (see

the light branding for hotels.com in the bottom right of the

adjacent screenshot), but the look and feel of the website for the

consumer remains the same.

Screenshots are for illustrative purposes and do not necessarily reflect actual bookings. However, 10 the scenarios are real.

LTA (a): Out-of-Scope Example

Consumer uses tabs to navigate between different travel services on the same website

The Consumer purchases a hotel night at the Washington Mayfair Hotel in London. When they receive their booking confirmation they click on one of the tabs above to check on flights. In this case there is no “facilitation”. The trader passively offers a range of different travel extras at the top of the booking confirmation page. Screenshots are for illustrative purposes and do not necessarily reflect actual bookings. However, the scenarios are real.

LTA (a): In-Scope Example

Offline travel agent “ facilitates“ a second purchase during a single

visit or contact with his point of sale

Screenshots are for illustrative purposes and do not necessarily reflect actual bookings. However, 13 the scenarios are real.

A consumer books a flight to

Johannesburg through a high

street travel agent.

Following the separate payment of the

flight, the travel agent asks the consumer

whether they would like a hotel in

Johannesburg. The travel agent then

“facilitates” a second transaction by

giving the consumer a brochure with hotel

options and together they make a second

booking which is also paid for separately.

LTA (b): In-Scope Example

Post sell in a “targeted manner” with an “invitation to purchase” through a deep link

to purchase

When receiving a booking confirmation of the first travel service (via email or equivalent), the consumer is invited to purchase an additional travel service through a link to an actual “offer for sale ”. Clicking through the deep link for the first hotel offer at the Park Plaza in Westminster Bridge, the consumer gets a bookable hotel offer Screenshots are for illustrative purposes and do not necessarily reflect actual bookings. However, the scenarios are real. Offer is from “another” trader

LTA (b): Out-of-Scope Example

OTA booking confirmation with hotel booking site advert

In this case, the consumer is shown an advert for a hotel booking site with a booking confirmation for a flight to Los Angeles. The site has the purpose of informing them about the availability of another relevant category of travel service. The location referenced in the advert is the same as the search but there is no specific offer being made. The off-line equivalent of this would be the static advertisement in the retail space or shop window of a high-street travel agent. If such an advertisement (e.g. a branded airplane display) would encourage the consumer to book a travel service separately at home, that travel service could never give rise to an LTA in combination with any other travel service booked during his/her visit in the travel agency. Screenshots are for illustrative purposes and do not necessarily reflect actual bookings. However, the scenarios are real.

LTA (b): Out-of-Scope Example

In this case the consumer is shown an ad from booking.com on a confirmation from a tourism board online shop following the purchase of a London travel card. The advertisement states that “There are 3628 hotels waiting for you in London”. This has the purpose of informing the consumer about the availability of another relevant category of travel service (so for a specific location but not linked to the specific travel transaction of that specific customer). Should the customer click on the ad he/she will have to complete a new booking path providing name, e-mail address payment details etc. on the website of the other trader which is clearly branded differently to the consumer.

Tourism board transactional website with supplier/OTA ad

Screenshots are for illustrative purposes and do not necessarily reflect actual bookings. However, 18 the scenarios are real.

LTA (b): Out-of-Scope Example

Supplier website

Supplier website with other supplier ad

The consumer receives an advertisement from the Accor hotel group after booking a Thalys to Paris: “Up to 10% off your hotel”. This has the purpose of informing the consumer about the availability of another relevant category of travel service (so for a specific location but not linked to the specific travel transaction of that specific customer). Should the customer click on the ad he/she will have to complete a new booking path providing name, e-mail address payment details etc. on the website of the other trader which is clearly branded differently to the consumer. Screenshots are for illustrative purposes and do not necessarily reflect actual bookings. However, the scenarios are real.